UK: GBP very vulnerable to further setbacks in the corona crisis – Nordea
Near-term strength on the food exports theme is set to go head to head with month-end rebalancing today/tomorrow. Expect volatility on the NZD/USD pair, in the opinion of analysts at ANZ Bank.
“The UK has a twin deficit with the biggest current account deficit (as % of GDP) in G10. A constant capital inflow is therefore needed to underpin the GBP which is challenging in the present ‘dash for cash situation’.”
“The UK has a large and systemic important banking sector which is particular exposed in times of credit crunches and disturbances in the global funding system.
“After years of Brexit uncertainty and low returns, the sterling has lost some of its appeal as a major reserve currency.”